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A View of The IRS Through Corporate Insider Eyes – Corporate Tax Audit Survival – Part 5

Reference Cliff Jernigan's eBook Corporate Tax Audit SurvivalThis is Part [5] of a series of a Chapter in the eBook “Corporate Tax Audit Survival- A View of The IRS Through Corporate Insider Eyes” by Cliff Jernigan.

You can download the entire eBook here.

Sample From Chapter 4: “The System”

One of my first IRS assignments was to co-manage a project associated with updating the corporate tax return filing system.

Together with another LMSB executive, I met with a group of IRS employees who had been detailed to a design team for this purpose. An outside consulting firm had been hired to assist the IRS team.

The design team and outside consultant had been discussing options for several weeks. Every wall of the meeting room was plastered with large sheets of paper listing the pros and cons of the project. I asked if they had arrived at any conclusions, and they said they had gotten so mired down in the project details that they were having trouble making any recommendations.

The group asked us to review a report that they were writing to management. We suggested they compose an executive summary to the document in order to help crystallize their thinking. They went back to work and returned with a ten-page executive summary for a 50-page report. Furthermore, the report contained no conclusions. They simply had not been able to identify the major issues.

My associate and I helped them to synthesize their findings into a three-page executive summary, a process that helped them see where the project was going.

Sadly, this design team exercise was typical of my experience with many Service projects. A lot of smart people are expending a tremendous amount of effort without resolving the problems to which they have been assigned. I think the problem is due to a lack of strong leadership during the design team process. Most of the process seems to be consensual, and the attempt to achieve consensus makes it difficult to maintain focus on the end result.

I have one final observation from my first 30 days at the IRS. I had been asked to participate in a team exercise with the other Senior Industry Advisors dealing with an international problem. We all traveled to Washington for a two and one-half day meeting. Facilitators are commonly used in the IRS to help lead discussions, and one had been brought in from the Midwest to help us organize our thoughts.

The meeting might have been concluded in about a day, but because it was scheduled to last two and one-half days, we all had to stay for the entire time. I believe that often too little attention is given to the dollar value of the time that is wasted by requiring meetings to last longer than necessary.

After my first 30 days I became more comfortable with the IRS way of doing things. In truth, my background with industry, especially the 22 years I spent with the very entrepreneurial and free-spirited high-technology sector, never permitted me to be fully at ease with many IRS practices.

In accordance with Circular 230 Disclosure


Cliff Jernigan is a long-time member of the California bar, with a law degree from Hastings College of the University of California and an advanced tax law degree from New York University Law School. He has been associated with a New York City international law firm and has held corporate tax counsel positions in the areas of banking, chemicals, food and real estate, and semiconductors, where he was Director of Tax and Global Public Policy for AMD. His last position was as a US Treasury Department appointee in the senior management of the IRS in the Large and Mid-Size Business Division, where he advised management on the major issues of the telecommunications, high-technology and media industries.

Jernigan has been a leader in promoting positive relationships between industry and the IRS. He was a founder and first president of the Santa Clara Valley Chapter of the Tax Executives Institute, the founder/director of the Silicon Valley Tax Directors Group, the Chair of the Tax Committee of the American Electronics Association, and the Chair of the Semiconductor Industry Association.

For many years he was a part-time business school adjunct assistant professor at Golden Gate University and an instructor in the Graduate Tax Program at San Jose State University.

Jernigan has written three books. Two of the books dealt with the topic of international trade issues for the high-technology industry. The last book describes his experiences during his appointment to the IRS.